Mortgage lenders offer different types of help so it’s important to contact your lender directly if you’re struggling to pay.
Your mortgage lender will want to help you if you’re struggling with your monthly payments. Here are some examples of how they might be able to do this.
If you’re on a repayment mortgage you may be able to switch to an interest only mortgage. This will reduce your monthly payment as you’ll only be paying the interest on the mortgage, rather than the interest and the capital. This isn’t a long term solution as this type of mortgage means you only ever repay the interest part of the mortgage. You need to make sure that you can repay the capital (the original amount borrowed) at some point before the end of the term.
Extending the term
Depending on your age and the amount of time left on your mortgage your lender might be able to increase the number of years left on your mortgage. This will reduce your monthly payment helping to make it more affordable. You should consider if you’ll be able to continue repaying the mortgage on an extended term, particularly if this means you’ll still be paying your mortgage after retirement.
Your lender might be able to offer you a payment holiday. This means you’d have a break from paying your mortgage for a few months. You’ll need to catch up with these payments before your mortgage term ends. It’s possible that your lender will still charge interest in this period which means you'll pay back more overall.
Reducing the interest rate
Your lender might agree to reduce your interest rate. This will reduce the monthly payment which might make your payments easier to afford.
Assisted voluntary sale schemes
Your lender may offer an assisted voluntary sale scheme. This means they will give you extra time and help if you decided to sell your property.
You can only find out what your lender can do for you by contacting them as soon as you think you may be in difficulty.